CAPITAL MANAGEMENT UNDER
ECONOMIC CRISIS
Educational
and Research Institute of Economics and Management, NUFT
Victoria
Yarmolenko
Market transformations in Ukraine fundamentally
changed the conditions of operation of enterprises, including the conditions of
formation and use of their financial resources. The
circumstances of the main changes in the system of financing the activities of enterprises
brings about a lot of questions on the optimization of the enterprise as it
concerns the total financial resources.
Modern economist I.A. Blank defined capital as a
system of collecting the excess of economic benefits in form of money and real
capital products which draws the owner to economic process in form of investment
resource and factor of production with the aim of receiving income which in
factual in economic system under the market principle and is connect to the
factors of time, risk and liquidity. Ignoring the fact that bankruptcy brings
about natural factors of survival, more competitive enterprises under free
market conditions it will be inappropriate to underestimate its destructive
consequences to the owners of the capital, employees, partners in particular and
the society as a whole. Today there is a growing need for the effective anti-recessionary
financial management as a tool for the methods and measures that can prevent a
financial crisis and avoid bankruptcy on time.
Under the condition of unstable financial activities
in the global market, the out boast of competition on the local markets for
goods and services, non professionalism of managers and misuse of positions
provides the stiff tendency of increasing the in competencies of enterprises. During
financial crisis, there exist not only economic entities of life circles that
comes to an end, but enterprises which have reach the picks of their existence
and are leaders of their sphere. Unstable economic situation forces the owners
to re-look into the sources of their capital formation and give emphases to
less risky components. For minimizing risk and reducing total expenditures,
stock holders turn to using personal resources which is not in consistence to
the western theoretical stands on a higher cost of personal resources in
relation to the creditors.
Enterprise that runs its businesses exclusively on
personal capital have a higher financial resistance however, it does not use
financial possibilities of increase profit return on invested capital, thereby put
constraints to the temp of its growth. On the other hand, use of other credits
capital allows enterprise a more higher growth potential and expansion of scope
of its financial economic activities, and influence the increase of the capital
profitability but under this scheme, the enterprise encounters existing
financial risk leading to bankruptcy which is necessary for decided which way
forward on the political formation of the capital structure [3].
Management of financial state of enterprises is a
complex process, which requires constant influence of the subjects of the
object of financial management under the help of define system of methods and
technical sources using special technology for the achievement and providing
enterprise with the financial resources required for its normal financial
activities, purposeful and effective distribution and use of resources financial
relationship with other entities, purchasing power and financial resistance
with the aim of increasing the effective functioning of subject of the
entrepreneur activities and also determining the areas of its development both
on long and short term bases. Management of financial state of enterprise
differs when in financial crisis. The management under these conditions are
called anti- crisis financial management.
Anti- crisis financial management is the management
which is redirected to predicting the danger of financial crisis, the analyst
of its symptoms and the removal of treats of occurrences of crisis situation now
and hereafter. In event of such occurrences, the analyst of fast solution for
liquidating it with the less lost and lest negative effects to the enterprise
with the aim of reestablishing and finding new competitive conditions and the
optimization formation distribution and use of financial resources towards
returning to full profit making activities.
Anti- crisis financial management during crisis
situation considers: Building of effective system for collecting, processing
and interpretation of financial and anti-crisis information in the enterprise; Timely
diagnostic pre-crisis situation of the economic entity; Working out and
realizing complex preventive warnings of upcoming financial crisis of the
enterprise; Working out mechanism of anti-crisis financial management of
enterprises under the threat of bankruptcy; Overcome the insolvency and the
unprofitability of the enterprise; Restoration of financial resistance of the
enterprise; Earlier warning of bankruptcy and liquidation of enterprise; Perfecting
the system management of enterprise with the elements of anti-crisis financial
management.
Under the condition of modern economic situation, the
strategy of optimization of the capital structure is reconsidered: rouse of
personal capital and the reduction of its lost. Decision on the raise of
personal capital must be redirected towards optimization of price policy; reduction
of fix and variable costs; implementation of tax policy, which provides
optimization of tax payment; implementation of depression of assets and others.
Reducing the lost of personal capital provides the reduction of the investment
activity of the enterprise; the resistance of dividend policy that provides the
rouse of net profit; conversion of short-term credits to long-term credits; simplify
the organization structure of the enterprise. These actions could lead the
capital structure, separate sections and capital complex as a whole to the proportions
that react to the reduction of debts to the barest minimum and raise of financial
inflow and saving of financial outflow.
References
1. Бланк
И.А. Управление капиталом: учебный курс. - К.: Вид-во «Эльга», Изд-во
«Ника-Центр», 2004. - 576 с.
2. Попов
О.Є., Котов А.М., Зайцева Т.Г. Розподіл і реалізація корпоративного контролю
при формуванні капіталу акціонерного товариства: монографія / О.Є.Попов, А.М.Котов,
Т.Г.Зайцева. - Харків: ІНЖЕК, 2009. – 320 с.
3. Фінансовий
менеджмент: підручник / Кер. кол. авт. А.М.Поддєрьогін. - К.: КНЕУ, 2005. - 535
с.
4. Сіліна
І.В., Хацер М.В. Управління фінансовим станом підприємства в кризових умовах/
І.В. Сіліна, М.В. Хацер//Економіка та держава. – 2015. - №11 – С. 85-88.
Scientific supervisor: L. Vlasenko